Stelco Plan Receives Court Sanction
Article Orginally published in TLA Journal, February 2006
Excerpt from "Stelco Plan Receives Court Sanction":
In comprehensive reasons released January 20, 2006, Mr. Justice Farley of the Ontario Superior Court of Justice (Commercial List) confirmed that Stelco Inc. had cleared a major hurdle on its path to emerging from insolvency protection.
Stelco received protection from its creditors in January 2004. It found itself immediately facing claims by its unions, among others, who asserted that Stelco was not insolvent. The case has produced several important precedents including the decision of Farley J. of March 2004 (leave to appeal to both the Court of Appeal and the Supreme Court of Canada denied) in which he expanded the definition of "insolvency" for the purposes of the CCAA. Also noteworthy is the decision of the Ontario Court of Appeal, overruling Farley J., and holding that the CCAA does not entitle the presiding judge to remove directors from the debtor's board of directors. The outcome of that decision has now been overruled by Parliament in recent amendments to the CCAA that expressly empower the CCAA Judge to replace board members.